Category Archives: Year 1

Lean Internationalization – how to enter new markets with less financial risk

A note as to finding the right Country Manager for your US-operation

Ask yourself the following:
– Who on my team has worked with me for a very long time,
– do I trust fully with a P&L of the USA and to do the best thing for the company,
– knows the ins and outs of our business,
– do i respect and can make me change my mind,
– is able to think strategically and provide input down to the tactical and operational level based on market feedback,
– knows our organization inside and out and has trust throughout = can get things done by people that do not report to him,
– is able to engage and listen to customers in a professional manner,
– is able to translate customer feedback into actionable insights for his organization (product, support, sales, implementation, pricing, etc)
– is resourceful and creative and has proven to be able to take on the hardest and toughest projects that require stamina and determination to succeed?
– is able to work well together with someone native from the USA,
– speaks and writes good English,
– has the family environment conducive to our ambitions.

Were you able to check off all the boxes? Congratulatins, you’ve found a great candidate to be your Country Manager!

What does it cost to run your US operation? A real-life expense template based on having helped over 50 international companies in the USA

Because we get the question: “What does it cost to do business in the USA?” we’ve decided to publish a template budget for year 1 of your US operation. This template budget can be found under resources here.

Since we’ve worked with a large variety of firms, we believe the budget represents a good baseline for any type firm, i.e. you should be able to use it as a baseline for budgeting and forecasting. Please note that the biggest variables in the budget are represented by your staffing needs and your emphasis on growing inbound demand through digital marketing and events.

The team behind @katapultgroup has helped over 50 small and midsize technology enabled companies with establishing and growing their operations in the USA. From this experience, we’ve learned a few tricks as to the best and most economical way of setting up your US subsidiary and running it in a capital efficient manner. Please feel free to reach out to us to discuss.

Below is a copy paste version of the budget if you’d like to simply review it:

FINAL Expense estimate for small and midsize companies wanting to establish themselves in the USA - Success In The USA .xlsx

Expense typeMonth 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12Annualized
Variable expenses
Business development and marketing investments1001001001002002002002002002002002002000
Travel and entertainment with clients/partners in N.A.100100100150010010010010020001000100010007200
Travel to home office4000 4000400012000
Visit by CEO of home office40004000
Leads data8008008008008008008008008008008008800
LinkedIn professional account808080808080808080808080960
LinkedIn ads2502502502505005002000
Cost of international phone calls to South-America, Skype subscriptions, similar252525505050505050505050525
Events cost (not trade shows)5005005005002000
Fixed expenses0
Salaries:0
VP North America100001000010000100001000010000100001000010000100001000010000120000
Inside sales associate 3000300030003000300030003000300030003000300033000
bonus for inside sales 1000100010001500150015002000200011500
Marketing and support / Client success manager 3500350035003500350017500
Office rent for 3 people with internet included12001200120012001200120012001200120012001200120014400
1 cell phone line with necessary add-ons1001001001001001001001001001001001001200
Virtual phone system for other team members and including your company's main-number505070707070707070707070800
Other office expenses such as paper, clips, coffee, snacks, other2002002002002002002002002002002002002400
Team events and culture building100 100150250 2504001250
Insurance coverages1500 5002000
0
Expenses that are in-frequent/optional0
Support for PR0
DIY PR support software and related 2002002002002001000
Trade show attendance 30003000
Website localization 2500025000
Localization including translation of marketing and sales materials 0
Various Legal services 10001000
Ongoing Book keeping 3003003003003003003003003003003003300
Blogging 4004004004001600
Social media 0
Google adwords10001000100010001000100010001000100010001000100012000
LinkedIn page creation and management 0
Facebook page creation and management 0
Twitter page creation and engagement 0
Graphic design support 800100010002800
Registration with the city 125125
Incorporation of the company1100 1100
Visa for VP North America and his family5000 5000
Trade mark registration 0
Filing of patents 0
Legal review of company's standard sales contracts2000 2000
Legal review of customer's contract (based on Fortune 100 customer) 800800
Setup of books by book keeper500 500
Quarterly reviews by accountant 0
Sales tax study and recommendations 0
Transfer pricing study 0
Accounting: Annual filing 50005000
Employee handbook 1000 1000
US contracts creation 0
Outsourced sales and growth support 0
Total279551705520975193002260019050208502830053350281002510030125312760
FINAL Expense estimate for small and midsize companies wanting to establish themselves in the USA - Success In The USA .xlsx

 

 

The Startup Chasm – the most difficult journey for international companies entering the USA.

Small and medium-sized international businesses who want to enter and grow in the USA will need to pass the “Startup Chasm” – the most difficult journey for international companies wanting to enter the USA and achieve success.

I define the Startup Chasm (inspired by Geoffrey Moore’s Chasm theory) by the critical first period you have to go through after evaluating the market and having said GO to entering the USA, but before you have a significant customer base and a steady and ongoing business in the United States. Looking in the rearview mirror the Startup Chasm is easy to recognize and rationalize however looking ahead and into the Chasm, the Chasm most often is appearing as small, insignificant and very temporary. A small hole in the ground that will be easy to surpass.

Most small and medium-sized international enterprises are sadly unaware of the depth of the Startup Chasm and the resource requirements for successfully making it through. This lack of respect and know how of the Startup Chasm is, in my experience the primary reason for international businesses to fail in the US market.

If you want to survive in the US-market, you need to be highly aware of the Startup Chasm, the resources and team work it takes to overcome it and the time before the Chasm is behind you. Most companies that fail in the USA fail for some reason related to being unable to make it through the Startup Chasm. 

What is your Sales Manager really doing back there???

Welcome to doing business in the USA!

The United Stated of America. This is place where time never stops, when everyone is 24/7, where expectations are high….Are you ready for it?

If you sell technology your lonely wolf, the person that “runs your US Operation” will also have to be:
– The Account Manager
– Your 1st level supporter
– Your book keeper
– Your Junior Legal Councel
– The marketing department
– Your shipping and handling department
– Your Risk Management department to handle insurance coverage needs with your enterprise customers

His or her most important role is to be your Sales Manager. Please make it possible!